Buying the Press Herald: Connor makes no money on real-estate deal

Richard Connor is clearly not in the real-estate business.
He bought a landmark Portland
property in June and sold it in July for no profit. And while he paid
significantly less than the assessed value according to city records, perhaps
he was just trying to break
even on that part of the deal, which bought him three newspapers and rather a
lot of real estate for a total of an estimated $30 million to $40 million.

A review of the documents shows that Connor paid $17.9
million for the real-estate portion of his deal with the Blethen family, in
which he purchased the Portland Press Herald, the Kennebec Journal, the Central
Maine Morning Sentinel, and related Web sites and real estate.

He has so far sold off the properties in Portland - the landmark Press Herald
building, the low building across the street (next to City Hall), and a floor
in a parking garage - for exactly what he paid for it.

Specifically, Connor paid
$6.3 million to purchase the properties at 390 Congress Street,
385 Congress Street,
and 164 Lancaster
Street on June 15.

A month later, on July 10, Connor sold 390 Congress and 385 Congress to New York developer John
Cacoulidis for $3 million and $2 million, respectively, and the parking garage
area for $1.3 million to A&M Partners, run by Arthur Girard and Michael Scarks. (They also own significant properties in
the city, including the Post Office Square building
right next to the Press Herald building, and are perhaps best known for their
redevelopment of the former JJ Nissen bakery on Washington Avenue.)

Also on June 15, Connor paid $7.1 million for the printing
and distribution plant at 295 Gannett Drive
in South Portland, $3.5 million for the Kennebec
Journal building in Augusta, and $1.1 million
for the Morning Sentinel property in Waterville.

He has said he is keeping the South Portland
building - which makes sense, because it is where the company's printing press
is located - and plans to sell the KJ building (which has a printing press
Connor recently stopped using). His plans for the Waterville
office are unclear, but he has said he wants to keep a presence in Waterville, so he may be
planning on staying put.

Obviously, the deal itself was for a larger amount than $17.9
million - all the buildings contain business equipment (computers, printing
press, and so on) worth another $37.4 million according to city tax records.
And documents on file in the Cumberland
County Registry of Deeds refer to four
separate but related loans for non-real estate matters that Connor took out
from the Royal Bank of Scotland/Citizens
Bank.

Whether those loans are all still outstanding is unclear,
but Connor told the Portland
Rotary Club in August that he "made enough" money in July to cover his next
quarterly debt payment, due sometime this month. That suggests that he does
still owe some money to creditors.

He has, however, already been able to pay off the mortgage
on the South Portland property, presumably with cash
raised from the sale of the Portland properties,
as well as with capital injections from his local business partners, Robert
C.S. Monks and John P.M. Higgins, who are cousins and part of the Sprague
family of Cape Elizabeth.

Here is the breakdown, by
property, of what Connor
bought, what, if anything, he sold it for, and the assessed value of the
property according to municipal records:

390 Congress Street,
Portland (landmark Press Herald
building)

-On June 15, Connor paid
$6.3 million for this plus 385 Congress Street
and 164 Lancaster
Street. The deal was
combined, so separating amounts allocated for each building is not possible.

-On July 10, Connor
sold this building to John Cacoulidis for $3 million.

-Its most recent assessed value is $4,487,100, according to Portland city records.

-On June 15, Connor paid
$6.3 million for this plus 390
Congress Street and 164 Lancaster Street.
The deal was combined, so separating amounts allocated for each building is not
possible.

-On July 10, Connor
sold this building to John Cacoulidis for $2 million.

-Its most recent assessed value is $3,677,700, according to Portland city records.

164 Lancaster
Street, Portland
(one floor in the parking garage)

-On June 15, Connor paid
$6.3 million for this plus 390
Congress Street and 385 Congress Street. The deal was
combined, so separating amounts allocated for each building is not possible.

-On July 10, Connor
sold this property to A&M Partners (Arthur Girard and Michael
Scarks) for $1.3 million.

-Its most recent assessed value is $720,000, according to Portland city records.

295 Gannett Drive,
South Portland
(printing and distribution plant)

-On June 15, Connor
paid $7,019,583 for this property. He has said he intends to keep it.

-Its most recent assessed value is $16,097,600, according to
South
Portland city
records.

274 Western
Avenue, Augusta (Kennebec Journal building)

-On June 15, Connor
paid $3,546,417 for this building. It is presently on the market, but has not
yet sold.

-Its most recent assessed value is $3,304,700, according to Augusta city records.

31 Front
Street, Waterville
(Morning Sentinel building)

-On June 15, Connor
paid $1,068,750 for this building. Its future is unclear, but he may keep it.

-Its most recent assessed value is $1,246,400, according to Waterville city records.

So Connor paid $17,934,750 for real estate assessed at
$29,533,500. (That real estate did come with the $37.4 million in business
equipment I mentioned earlier, but Connor is likely to have paid separately for
it, and is extremely unlikely to have paid the full assessed value.)

What he sells next, and what he gets for it, will be
interesting.

Portland Phoenix columnist and media critic Al Diamon helped
with the data collection and analysis; his post on the topic can be seen at www.downeast.com/Media-Mutt.
Portland Phoenix contributing writer Lance Tapley assisted with additional data
collection.